The Alaska LNG Project aims to transport natural gas from northern Alaska to the southern part of the state facing the Pacific Ocean via a roughly 1,300-kilometre pipeline, supplying gas within the state, and processing it into LNG (liquefied natural gas) for export. If realized, it would become an option for Japan's LNG procurement, but no Japanese company has made a concrete commitment to procurement due to concerns about profitability and feasibility. In an interview with Jiji Press, Dr. Brett Watson of the University of Alaska Anchorage, an expert on the energy market, suggested that LNG exports from the project "could be competitive" in the energy market centered on the Pacific region. He also expressed hope that Japanese companies would participate from the perspective of increasing the credibility of the project.
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The main exchanges are as follows.
-What is the importance of the project?
Alaska uses natural gas produced in Cook Inlet to power its homes and electricity. There are still reserves, but production costs are expected to rise. Potential new sources of gas are on the North Slope, and while options include hydro, coal, and renewable energy, none have the potential to replace the natural gas currently needed. In other words, Alaska's choice is to proceed with the project or import LNG. If the idea comes to fruition, it would also lead to tax revenue for the state.
-What is the project's competitiveness in the global market?
Depending on the cost of gas procurement and pipeline construction on the North Slope, tax incentives for the project are being discussed in the Alaska State Legislature, which would lower the break-even point. At post-coronavirus levels (when gas prices rose), the project could be competitive. At the current JKM price (which is a benchmark for the Asian market), which is around $15 to $20, it is definitely competitive.
-Will a concept that has not been advanced for half a century be realized?
It's something that Alaskans themselves have questioned, but it's coming true. Environmental and export-related permits have been obtained from the federal government, and specific cost estimates and designs have been made. There is a lot of work to be done, including contracts with Asian electricity and gas companies (who will be the procurement side) and pipe manufacturers, and financing, but we are making steady progress.
-What is the importance of procurement and participation by Japanese companies?
It would be difficult for an LNG project facing the Pacific Ocean to enter the market without purchasing from Japan, but it is also possible that it could be realized through purchasing from other Asian countries. However, Japanese energy companies are among the most market-savvy players. Participation by Japanese companies will lead to increased reliability of the business, and we have high expectations from that point of view as well.
-What is the contribution of the Trump administration?
